Willis quarterly revenue up 5.1%, but taxes, expenses blunt profit

Willis Group Holdings P.LC. said Tuesday that its second-quarter revenue increased 5.1% to $935.0 million as commissions and fees grew, but increased income tax charges and expenses limited its net income.

Commissions and fees for the quarter increased 5.1% to $930.0 million while net investment income jumped 33.3% to $4.0 million.

However, net income fell 55.1% to $48.0 million due to an income tax charge of $59 million, up from a $29 million income tax charge in the year-ago period.

Expenses also grew 8.9% to $787.0 million for the quarter.

“Strong revenue growth in the second quarter 2014 was more than offset by increased expenses primarily driven by investment in new hires since the end of the second quarter 2013,” Willis said in its earnings statement.

“Willis grew revenues strongly in many of its businesses and even saw modest growth in reinsurance, where the market faces significant rate pressure,” Willis Group CEO Dominic Casserley said in the statement. “A number of noncash and nonoperating items significantly reduced our reported earnings this quarter, but that should not detract from the performance of our business.”

For the six months ended June 30, revenue increased 4.9% to $2.03 billion as commissions and fees grew 4.6% to $2.02 billion.

However, net income fell 9.7% to $298.0 million for the first half of the year, Willis said.

Aside from acquisitions, Mr. Casserley said Willis’ salary and expense growth is expected to moderate in the second half of this year.